Private Debt: Slowdown in Q1 2018 The private debt industry had a banner year in 2017 in which 156 funds held a final close securing a record $115bn. This marked a significant increase from the previous record in 2015 when 178 funds raised a little over $100bn in capital. 2017 was also the only year…
Middle market loan issuance falls off in 1Q18 to US$32.2bn After heating up in 4Q17 to US$44.1bn, middle market lending flopped in 1Q18. Syndicated middle market issuance of US$32.2bn fell 27% and 16% from 4Q17 and 1Q17 levels, respectively. A light flow of new money activity was felt in both the sponsored and non-sponsored market…
No one ever got fired for buying IBM Investors appear to be adopting a ‘safety first’ approach as a decreasing number of managers benefit from continuing appetite for private debt. Excuse the rudimentary math, but if you take the total number of managers which closed private debt funds in the first quarter (28) and multiply…
1Q18 Global loan volume down 15% y-o-y; Decline felt across regions 1Q18 global loan volume tumbled 15% year over year to log less than US$924bn during the first three months of the year. No region was spared a more limited pipeline of deals. The Americas observed an 11% drop in regional issuance with less than…
PE performance update Download PitchBook’s Report click here. The run-up in public market valuations and its impact on PE has been discussed ad nauseum. Much of that impact has been negative, especially around multiples and a lack of suitable entry prices. PE’s strong suit has historically been the turnaround play—buy low, get your hands dirty,…
Credit Strategies Start 2018 with Positive Performance Preqin finds that credit strategy hedge funds have maintained their streak of positive performance, having generated positive returns on a yearly basis since 2009, and seeing returns of 7.41% in 2017. The strategy has started 2018 with a bang, producing positive performance in the first two months of…
Debt dynasty In a competitive atmosphere, LPs seem to like their GPs well enough that four-fifths would commit to a successor fund if the right chance presents itself. Despite the plethora of upstart private credit managers that have rolled out in recent years, it is still better to be an incumbent fund manager than a…
We’ve had eight business days of trading since the index roll on March 20, a date that will be remembered in the CDS world for the introduction of the new senior non-preferred tier (SNRLAC). Perhaps it is too early to give a definitive assessment of how the tier is performing relative to the rest of…
Looking ahead: PE’s near-term outlook Download Related Report click here. Private equity has enjoyed a historically long business cycle alongside historically low interest rates. With high multiples and lots of dry powder floating around, today’s market bears some resemblance to 2005-2007, but not too much. The latest crop of funds (2016 vintages and later) will…
Primary leveraged yields widen across the board due to rising Libor rate The increase in Libor rates has boosted yields on institutional term loans this quarter. The average yield, assuming a three-year term to repayment is at 5.42% so far in 1Q18; up from 4Q17’s 5.02%. Driving up the yields is the increase in the…